The Koblin Family Law Center

A prenuptial agreement offers protection for your business

Your business is important to you for many reasons. You have probably invested a lot of yourself into its success. Like most California business owners, you have sacrificed personal time, energy and money into growing your company. Now that you are getting married, your dream may be to continue growing and to pass your vision to your future children. Hard as it may be to imagine at this joyous and optimistic time in your life, there is one thing that can shatter your dreams: divorce.

It is likely the last thing you want to think about, but as a business owner, you know the importance of assessing and dealing with potential risks. If your company continues successfully, a divorce court will likely consider that increase in value to be marital property, which you will divide with your spouse. Additionally, marital debt may complicate your divorce if your spouse's creditors see your business as an asset to claim. By not having a prenuptial agreement, you may place yourself and your employees in jeopardy.

How to make it work

Once you broach the subject with your intended, the two of you can expect to spend some time figuring out the terms of the prenuptial agreement. While you want the agreement to be fair to your spouse, the future of the business is at stake, so you may wish to seek legal advice on the best way to proceed. Generally, as a business owner, you will focus on these factors:

  • Keeping the appreciation of your business separate from asset division
  • Limiting the liability of your business for debts your spouse may incur
  • Protecting yourself and your spouse from each other's separate debts
  • Protecting the interests of children you may have from a previous relationship

Additionally, since you are taking the step to protect your business with a prenuptial agreement, you may want to consider requiring such an agreement for any business partners you may have. Their divorces could jeopardize your business as easily as your own breakup.

For best results

To ensure the strength of your agreement, careful record keeping will be important. If you blend household finances with business finances or fail to keep accurate records of your earning capacity, a divorce court may question the separation of the business from the marital assets.

After tackling what might be a tricky conversation with your intended, you will want to make sure your prenuptial agreement is enforceable. One way to improve these chances is to have separate counsel for you and your intended. This way, a court will be assured that both of you had solid advice and willingly entered into the agreement.

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5700 Stoneridge Mall Road Suite 230 Pleasanton, CA 94588

The Koblin Family Law Center
5700 Stoneridge Mall Road, Suite 230
Pleasanton, CA 94588

Phone: 925-298-2961
Fax: 925-203-9797
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